Bowery's investment thesis is that "digital natives" are moving up the corporate executive stack, into decision-making positions like chief marketing officer and chief technology officer. Those executives are more likely to favor "new" technologies over incumbents, at a time when enterprise technology spend is expected to double over the next decade.
Bowery data suggests that just 5% of enterprise technology spend -- both internal and external -- was allocated to "next-generation" solutions in 2011, but that the figure will rise to 16% by 2016 and 25% by 2020. Examples would include Jive Software (JIVE) taking market share from Salesforce.com (CRM), or Splunk (SPLK) vs. Comscore (SCOR) or Box vs. IBM (IBM).
The opportunity Bowery will pursue is investment in early-stage startups that specifically target marketing and technology layers within large enterprises.
This makes complete sense. By way of example, at last week's CRE Tech forum in New York - panelists repeatedly referenced the demographic trends driving tech adoption: age and attitude matter. Today's successful senior leadership have established methods and relationships that may be strong enough to carry them through retirement - many are reticent to adopt new technologies in the vein of fixing something that, for them, ain't broke. But today's ambitious 30-somethings are avid users of technology in every part of their lives, this means two things:
1) Aspiring middle and senior managers have materially higher expectations for efficiency, information quality, and access, driven by their experience with technology in every other part of their lives.
2) They view technology it as a critical tool to help them establish an edge in their work.
This bodes well for Bowery, which expects to back roughly 25 companies, initially via seed and Series A investments of between $250,000 and $3 million. This would include a small group of companies Brown has backed as an angel investor, which will be rolled into Bowery: Codecademy, Sailthru, Premise and Moat.